Clause 3 - Full and reduced rates of state pension

Pensions Bill – in a Public Bill Committee at 11:00 am on 2nd July 2013.

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Question proposed, That the clause stand part of the Bill.

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

The clause does what it says on the tin. The full rate of the state pension is simply whatever is specified as the weekly rate, which we have said will be more than the level of the guaranteed credit. The reduced rate—the clause defines the terms in the Bill—is simply one thirty-fifth of the full rate multiplied by the number of qualifying years. Subsection (3) simply states that once we have set the initial rate—and obviously there are uprating provisions elsewhere in the Bill—we cannot use the regulations again to reduce that rate. We will set an initial rate for April 2016, which I assume will be set no later than autumn 2015, and once that is in place we cannot use the powers again to reduce the rate. Clause 3 follows logically from clause 2.

Photo of Gregg McClymont Gregg McClymont Shadow Minister (Work and Pensions)

I am satisfied with the Minister’s explanation. The issues, particularly what the reduced rate means for those who do not have time to meet the 35-year rule, will come into greater focus when we consider clause 4.

Question put and agreed to.

Clause 3accordingly ordered to stand part of the Bill.